General Motors and PSA Peugeot-Citroen are planning an European joint venture to strengthen their carmaking alliance announced earlier this year.
The news was brought by French online business newspaper La Tribune on Friday.
The joint venture would be formed by GM’s European subsidiary Opel and PSA Peugeot-Citroen’s core manufacturing division. Each partner will have 50 percent of the joint venture, according to the French online newspaper, which cited anonymous sources. And since PSA Peugeot-Citroen’s assets are worth more than those of Opel, GM may have to inject more cash into the joint venture, the report added.
GM declined to comment on the issue, while a Peugeot spokesman could not be reached to provide comments. General Motors, which took a 7 percent stake in Peugeot as part of the original alliance agreement, has to inject more cash into the joint venture under the new plan, La Tribune wrote.
However, the proposal will likely generate objections from the French government and has not yet been submitted to the Peugeot board, the report added. Another setback can be the fact that Peugeot/Citroen and Opel are direct competitors and are not complementary brands. All three brands are essentially focused on European markets and have products that compete against each other.